Manhattan apartment rents jump to record as bidding wars spread

[NEW YORK] Manhattan apartment rents soared to a record high in February amid intense competition, including bidding wars in a more than a quarter of all deals.

New leases were signed at a median of US$4,500 last month, according to appraiser Miller Samuel and brokerage Douglas Elliman. That’s up 6.4 per cent from a year earlier, and US$100 more than the previous record, reached in the summer of 2023.

It’s an eye-opening increase for the middle of winter, a time when the rental market historically was expected to cool. But renters have gotten little relief in the past three years. New lease signings rose annually for the 11th consecutive month in February, and Manhattan’s vacancy rate fell for a fourth time.

Bidding wars have become increasingly common in the hyper-competitive market, cultivated by real estate agents who urge potential tenants to offer to pay more than the asking price. Almost 27 per cent of last month’s new leases were signed after bidding wars, a record share.

“It’s one of the most challenging times to be a renter,” said Jonathan Miller, president of Miller Samuel. “It’s really an irrational market because such a large swath of it is driven by irrational bidding.”

He does not expect that to change in the near future. One of the reasons the market is so crowded is that some people who’d potentially planned to buy a home after November’s presidential election with the expectation of more certainty may instead be holding off, according to Miller.

“I would argue that the volatility we are seeing in the economy with the tariffs and the uncertainty that’s piling up is keeping consumers in rentals,” he said.

The price increases were not quite as extreme across the East River in Brooklyn and northwest Queens, though there were signs that those markets are under the same pressures as Manhattan’s.

In Brooklyn, the median rent was US$3,600, up 2.9 per cent from a year earlier and US$350 below the record high set in July 2023. But bidding wars were even more common than in Manhattan last month, happening in 35 per cent of deals. And the average price per square foot hit an all-time high for the borough of US$59.15, up 7 per cent from a year earlier.

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In the part of Queens that includes Astoria and Long Island City, the median rent rose 7 per cent from a year earlier – the fourth annual increase in five months – to US$3,466. BLOOMBERG